Reform at a glance

The Australian Prudential Regulation Authority (APRA) has announced a proposal to make a number of changes to Prudential Standard SPS 530 Investment Governance (SPS 530). Read the consultation paper, including a marked-up draft of SPS 530. APRA has proposed eight changes to address the evolving superannuation investment landscape: three new safeguards, and five that codify – and in places strengthen – what APRA already expects.

APRA says that the changes will have the greatest impact on platform trustees, and that trustees with robust investment governance practices will not be materially impacted. In our view, the reforms are far-reaching and will have implications for all superannuation trustees, not just those which operate superannuation platforms.

Overview of proposed changes

The eight changes fall into two groups: three new safeguards that go beyond what APRA currently requires, and five requirements that move APRA's existing expectations out of its non-binding guidance and into the binding Prudential Standard itself. We summarise each below, so you can see where the draft adds new obligations and where it formalises current practice.

Three new safeguards

• Member-level investment limits: For member-directed options, trustees must set and enforce a cap on how much of a member's superannuation balance can be invested in any single option. That limit set by the trustee must not exceed a prescribed maximum limit set by APRA. APRA's preliminary view is 20–30% may be an appropriate maximum limit. A trustee can set a higher limit, or none, only if it is satisfied that the investment option is lower risk, which generally means that the option is highly liquid, not significantly leveraged, highly diversified and, if externally managed, well established and well capitalised. These limits will be applied when a member invests, switches or makes a contribution, and will apply irrespective of whether or not the member has a financial adviser who has recommended a particular investment strategy.
• Third-party conflicts: Trustees will be required to assess conflicts of interest in respect of advisers, promoters and other third parties on an ongoing basis. Any such conflicts must be avoided, or effectively managed so that they do not inappropriately influence a trustee's decisions about which investments are made available to members.
• Capability and resources: Trustees who operate member-directed investment options will be required to set and review limits on the size, complexity and nature of their investment menu. Some trustees may need to either uplift their capability and resources, simplify their existing investment menus, or both, to meet this requirement.

Five codified requirements

• Onboarding: Trustees will be prohibited from making investments available to members unless robust due diligence has been completed, and an objective assessment has been made against clear criteria. Trustees would need to set and enforce a range of risk and performance matters at onboarding, including fees, liquidity, valuations, stress testing, governance, external information and conflicts.
• Monitoring: Trustees will be required to monitor investments against the same key risk and performance measures that are used when those investments are selected for onboarding. That monitoring will need to cover matters including changes in investment strategy, governance concerns, negative news, unusual cashflows, and other emerging risks.
• Remediation: Trustees will be required to take appropriate action when an investment option (or an underlying investment) fails to perform, breaches risk thresholds, or otherwise raises material concerns. These actions could include revising holding limits, removing an investment from the investment menu, and/or communicating actions to members. Importantly, APRA has also proposed that a trustee must take all reasonable steps to obtain 'active member consent' where a member remains invested in an investment option that is affected by material or persistent performance or risk issues.
• Valuations: Trustees will be required to undertake investment valuations at least quarterly. APRA will have the power to direct any trustee to obtain an external valuation if it has concerns about the reliability of an existing valuation, and considers that an independent valuation would be in the interests of members. APRA expects that these changes will primarily impact trustees who have weaker valuation practices.
• Accountability: APRA will require the relevant accountable person for each superannuation trustee to complete an annual attestation of compliance with legal and prudential requirements in relation to investment governance. Each trustee will need to take account of this attestation when determining the variable remuneration of the relevant accountable person.

What this means for your business

If the draft SPS 530 is made in its current form, platform trustees will feel its impact most. However, its effects reach well beyond platforms, and every superannuation trustee should read it closely: as drafted, it would significantly complicate the work of superannuation investment teams.

• For every superannuation trustee, every investment (whether offered directly to members or as part of a pre-mixed investment option) will need to be assessed against documented criteria before onboarding, and then monitored against the same criteria. Even if trustees are already doing this to some extent, the changes are likely to require more documentation, more formality, and more defined escalation paths.
• For platform trustees, even those with a small member-directed investment offering, member-level investment limits will need to be set and enforced. Conflicts of interest, capacity and resources will need to be formally addressed on an ongoing basis.
• For Investment managers, the reforms would likely bring more information requests, deeper look-through and closer scrutiny of fees, liquidity and valuations. The possibility of independent scrutiny of unlisted asset valuations is likely to be of concern to investment managers, particularly in relation to private equity and venture capital assets where valuation information is highly commercially sensitive and assets are harder to value.
• For accountable persons, the proposed attestation, and its link to variable remuneration, could create a more direct route to personal consequences for investment governance failures.

Some broader themes

Beyond the direct effects noted above, some broader themes stand out.

• Self-managed superannuation fund (SMSF) as a last bastion for choice: If investment limits are imposed by platform trustees, superannuation consumers who want a high degree of choice and control may find that the less regulated SMSF sector becomes a more attractive option. SMSFs are not prudentially regulated, and therefore outside APRA's purview. From a policy perspective, we wonder whether the absence of equivalent limits in the SMSF sector will ultimately give rise to some of the same consumer protection issues that have been raised in respect of superannuation platforms.
• Choice and advice: Trustees would be asked to set limits even for advised members. The consultation paper also asks whether trustees should be required to aggregate a member's exposure across higher-risk investment options to minimise 'avoidance' of the investment limits which are to be set by platform trustees. APRA says it wants to preserve meaningful choice, but the reforms raise the question of whether, taken together, these measures will leave members (even those who are acting on good quality financial advice) with sufficient choice to justify the use of a superannuation platform at all.
• Principles by another name: APRA explains that principles-based regulation has not worked in this area, so it has proposed more detailed requirements. Ironically, many of the supervisory functions trustees would be asked to take on under the draft remain principles-based in nature. Terms such as “highly diversified”, “material or persistent” and “all reasonable steps” all call for judgement. That is understandable – investing is a judgement-based discipline – but trustees would need defensible, well-documented judgements if the standard is made as proposed.
• A greater communication role for trustees: In a number of instances, APRA's proposals would require trustees to take a more proactive role in communicating with members about investment-related matters. For example, platform trustees would need to notify members when a holding limit is materially and persistently exceeded (for example, through market movements) and explain the options available. Members in underperforming investment options would need to be notified and advised of their options, potentially front-running the results of the annual performance test which APRA conducts. Trustees would need to carefully manage this process to ensure that any such communications are consistent with the laws regarding the provision of personal financial advice. This could create confusion where a member receives conflicting information (e.g., one proposal from their superannuation trustee, and a different one from their financial adviser).
• Focus on individual investments: For trustees offering pre-mixed diversified investment options, the requirement to benchmark the performance of each individual investment within that option sits uneasily with the modern approach to portfolio construction. Some investment holdings may deliberately lag, or be countercyclical, in the interests of the broader performance of the entire portfolio. The new proposals seem to imply that trustees could end up managing individual investment-level metrics rather than whole-of-portfolio outcomes. If this applies to all superannuation trustees (i.e., not just platform trustees), as seems to be the case based on the draft prudential standard, then that would give rise to a significant change in the way that investment teams measure performance across their investment portfolios.
• 'Appropriateness' of investment options: The draft prudential standard would require a superannuation trustee to be satisfied that each investment option is 'appropriate', having regard to the relevant option's intended beneficiaries. It is unclear how this new requirement interacts with the existing duties which require superannuation trustees to make similar assessments (e.g., the requirement to make a Target Market Determination and the various investment covenants under the SIS Act). Additional guidance from APRA would assist trustees to understand how this new requirement is intended to operate in practice.

Key dates and status

• Current status: The consultation paper and draft SPS 530 were released in September 2026.
• Proposed start date: 1 January 2028, subject to consultation. The draft has no legal effect until the new standard is made. The existing version of SPS 530 will continue to apply until that date.
• Next milestone: Submissions close on 3 February 2027. APRA expects to finalise the standard and release draft guidance in the first half of 2027.

How to respond to the consultation

The draft has not been made and would not take effect until 2028 at the earliest. Between now and 3 February 2027, we suggest trustees:

1. Assess the draft in light of your business: Identify which member-directed options, menu features and third-party arrangements would be caught, and whether your existing onboarding, monitoring and remediation practices would fall short.
2. Talk to your investment managers: Test how the conflicts and valuation proposals would affect those relationships.
3. Gather evidence: Estimate the practical effect of the proposals – for example, how the proposed 20–30% limit would apply across the investments you make available to members, and what monitoring each underlying investment would involve.
4. Brief your board and accountable persons: We would be happy to assist in briefing your board and executives on the effect of these proposals, including the attestation requirement and its link to variable remuneration.
5. Settle your key messages: If you are considering making a submission to APRA, narrow the issues to those which genuinely require reconsideration or clarification.
6. Make a submission: Submissions close on 3 February 2027. We would be happy to assist in preparing a submission on behalf of your organisation.

Contact our team

If you would like help assessing the draft’s impact or preparing a submission before 3 February 2027, please contact our team.